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Asian Review of Financial Research, Vol., No..
pp.707~755
pp.707~755
Foreign Currency Denominated Debt and Dividend Policy
Youngmok Choi College of Economics & Business Administration Cheongju University, Korea
Kunsu Park School of Accountancy The Shidler College of Business University of Hawaii at Manoa
We examine whether foreign currency denominated debt affects corporate dividend policy. Specifically, this study tests the prediction that foreign currency denominated debt ratio is negatively related to the likelihood of paying dividends and the levels of dividends. Consistent with our prediction, we find that firms with a higher foreign currency debt ratio are less likely to pay dividends, and pay lower levels of dividends when they do. These findings indicate that foreign currency debt ratio is one of the important factors that affect corporate dividend policy. Our results provide evidence that foreign creditors have the potential in determining corporate dividend policy.
Youngmok Choi
Kunsu Park
We examine whether foreign currency denominated debt affects corporate dividend policy. Specifically, this study tests the prediction that foreign currency denominated debt ratio is negatively related to the likelihood of paying dividends and the levels of dividends. Consistent with our prediction, we find that firms with a higher foreign currency debt ratio are less likely to pay dividends, and pay lower levels of dividends when they do. These findings indicate that foreign currency debt ratio is one of the important factors that affect corporate dividend policy. Our results provide evidence that foreign creditors have the potential in determining corporate dividend policy.